BP PAKISTAN EXPLORATION AND PRODUCTION INC., KARACHI VS ADDITIONAL COMMISSIONER, INLAND REVENUE-B ENFORCEMENT AND COLLECTION DIVISION-I, KARACHI, 2011 PTD-KARACHI-HIGH-COURT-SINDH 647 (2010)

(a) Constitution of Pakistan---

----Art.199---Constitutional petition---Alternate remedy---Scope---Where there is alternate remedy available, constitutional jurisdiction under Art.199 of the Constitution cannot be invoked---While exercising constitutional jurisdiction, High Court must be first satisfied about non-availability of any other adequate remedy provided by law to petitioner---Authority vested in High Court under Art.199 of the Constitution is not meant to render alternate remedy redundant.

Khalid Mehmood v. Collector of Customs 1999 SCMR 1881 rel.

(b) Income Tax Ordinance (XLIX of 2001)---

----Ss.122 (5A), 127 & 187 (1)---Constitution of Pakistan, Art.199---Constitutional petition---Maintainability---Alternate remedy---Income tax assessment---Previous practice---Maxim, remedium juris---Applicability---Assessee instead of filing appeal under Income Tax Ordinance, 2001, assailed assessment before High Court in exercise of Constitutional jurisdiction on the plea that the same was in violation of its own previous practice---Validity---It was incumbent upon assessee to have availed alternate remedy under law before approaching High Court for redressal of grievance by invoking constitutional jurisdiction under Art.199 of the Constitution---Where alternate forum was provided, provisions of Art.199 of the Constitution were not attracted and it was attracted where order passed by the authority purportedly lacked jurisdiction---As the only grievance of assessee was with regard to alleged misinterpretation of S. 187 of Income Tax Ordinance, 2001, and the same could be agitated before appellate authority---Invoking of constitutional jurisdiction under Art.199 of the Constitution at such stage was premature---Alternate remedy provided was remedy in law and was not less convenient, beneficial or effective and principle of "remedium juris" was applicable---As alternate remedy was available to assessee, invoking jurisdiction under Art.199 of the Constitution was not warranted---Petition was dismissed in circumstances.

Syed Muhammad Amin and another v. Federal Public Service Commission 2002 PLC (C.S) 1538 and Syed Match Company Ltd. v. Authority under Payment of Wages Act 2003 SCMR 1493 ref.

(c) Income tax---

----Estoppel and res judicata---Applicability---In tax matters every year is a separate and distinct entity and principle of estoppel and res judicata do not apply to tax proceeding.

(d) Interpretation of statutes---

----Fiscal statute---Previous practice---Estoppel and res judicata---Applicability---In tax matters every year is a separate and distinct entity and principle of estoppel and res judicata do not apply to tax proceeding.

Muhammad Umer Soomro for Petitioner.

ORDER

IRFAN SAADAT KHAN, J.---These Constitutional Petitions have been filed with the prayer that impugned orders dated 15-10-2010 and the show-cause notice dated 11-12-2010 for recovery of additional tax for the tax years 2003, 2004 and 2005 be declared to have been passed without lawful authority and of no legal effect. It is also prayed that the respondents may be directed to refrain from collecting the demands created in the impugned orders.

2. Briefly stated the petitioner is a company engaged in exploration, extraction and production of petroleum products in Pakistan. On 28-4-2008 the Additional Commissioner, Large Taxpayers Unit (LTU) passed an assessment order for the tax years 2003, 2004 and 2005, respectively, under the provisions of section 122(5A) of the Income Tax Ordinance, 2001 (the Ordinance) by observing that the petitioner has incorrectly claimed the credit of Workers Profit Participation Fund (WPPF) which payment has already been allowed to the petitioner in the previous assessment years and the present claim of the said amount under a different nomenclature amounts to a double claim. After detailed deliberation the Additional Commissioner passed the above orders and also observed that misleading statement has been filed by the petitioner which action attracts penal provisions as enshrined under the provisions of Ordinance. On the basis of the observation made in the assessment years proceedings under sections 187/122(a) read with section 182 after amendment by Financial Act, 2010 of the Ordinance were initiated. Notices in this regard were issued to the petitioner who replied to the same and the Additional Commissioner after a detailed discussion came to the conclusion that as the petitioner has violated certain provisions of the Ordinance, imposed a penalty at the rate of 200% of the tax shortfall vide his order dated 15-10-2010 against which the present petitions have been filed.

3. Mr. Muhammad Umer Soomro Advocate appeared on behalf of the petitioner and submits that in the assessment year 1999-2000 somewhat similar action was taken with regard to the interpretation that whether the payment of WPPF could be held to be a payment to Federal Government. According to the learned counsel in the appeal before the Income Tax Appellate Tribunal (ITAT) the same issue was decided in his favour wherein the deduction of WPPF was held to be payment to the Federal Government. Hence, according to the .learned counsel the department has deviated from its own previous practice, which action, in his opinion, is illegal. As per the learned counsel the department has misinterpreted the provisions of section 187 of the Ordinance .and no purpose would be served if appeals against the impugned orders are filed by him before the Commissioner of Income Tax (Appeals) being an income tax authority and no relief is expected from him. He further submitted that against the orders passed by the Additional Commissioner under section 122(5A) for the tax years 2003 to 2005 the matter is already sub-judice before the ITAT.

4. We have heard the learned counsel at length and have also perused the record. Before giving our opinion that whether the orders impugned are valid or legal order, we would first like to reproduce herein below the provisions of section 127 of the Ordinance which states as under:--

127. Appeal to the Commissioner (Appeals).---(1) Any person dissatisfied with any order passed by a' Commissioner or a taxation officer under sections 121, 122, 143, 144, [162,] 170, 182 183, 184, 185, 186, 187, 188, or 189, or an order under subsection (l,) of section 161 holding a person to be personally liable to pay an amount of tax, or an order under clause (f)_ of subsection (3) of section 172 [declaring] a person to be the representative of a non-resident person, or an order under section 221 refusing to rectify the mistake, either in full or in part, as claimed by the taxpayer or an order having the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the person, may prefer an appeal to the Commissioner (Appeals) against the order.

5. Perusal of the above section reveals that an order passed under section 187 of the Ordinance has been specifically made appealable in the said Ordinance. It is a trite proposition of law that whenever there is an alternate remedy available writ jurisdiction under Article 199 of Constitution of Islamic Republic of Pakistan could not be invoked. While exercising constitutional jurisdiction the High Court must be first satisfied about the non-availability of any other adequate remedy provided by the law to the petitioner. This authority vested in High Court is not meant to render alternate remedy redundant. From the pleadings of the learned counsel it appears that the petitioner is aggrieved against the interpretation of the provisions of section 187 which in our opinion could be agitated in appeal before the Commissioner of Income Tax (Appeals), if so advised. There are plethora of judgments. given by this Court and the apex Court that the bar contained in Article 1.99 authorizes this Court to exercise its powers under the said Article only when if it is satisfied that no other adequate remedy is provided under the law. Reference in this regard may be made to the decision given by the Hon'ble Supreme Court of Pakistan in the case of Khalid Mehmood v. Collector of Customs (1999 SCMR 1881) wherein the Hon'ble Apex Court observed as under:

"As to bar of jurisdiction, it is to be noted that Article 199 of the Constitution opens with words to the effect that the High Court may exercise its powers under such Articles only "if it is satisfied that no other adequate remedy is provided by law". Adequacy of the alternative remedy, therefore, if there 'is another remedy available, should always attract the attention of the High Court."

6. This decision of the Hon'ble Supreme Court was subsequently followed in a decision given by the Peshawar High Court in the case of Syed Muhammad Amin and another v. Federal Public Service Commission [2002 PLC (C.S.) 1538].

7. The matter does not end here, if the petitioner is aggrieved against the order passed by the Additional Commissioner the petitioner can file an appeal before the Commissioner (Appeals) and thereafter to ITAT and thereafter by way of filing reference application to this Court. Reference in this regard may be made to the decision given by the Hon'ble Supreme Court of Pakistan in the case of Khalid Mehmood, mentioned supra, wherein the Hon'ble apex Court observed as under:

"There are other matters, however, where the Constitutional jurisdiction under Article 199 cannot be so readily resorted to. One such, falling in this category, would be matters amenable to the jurisdiction of an exclusive Tribunal, mandated by the Constitution itself. Another, which readily comes to the mind would be disputes under a statute, postulating the appellate or revisional jurisdiction to reside either in the High Court itself or directly in the Supreme Court. An example, essentially relevant to the first would be the Service Tribunal where the Tribunal is mandated by the Constitution of Pakistan namely, Article 212, thereof and where an appeal lies directly, from the Tribunal's decision to the Supreme Court. Obviously, the High Court should be very slow in entertaining disputes covered by the jurisdiction of such a Tribunal even in matters where the High Court's jurisdiction cannot be taken away e.g. acts which are void, without jurisdiction or coram non judice. In such cases of ouster, the High Court would consider it a better exercise of its discretion not to interfere. More or less a similar principle applies where an exclusive Tribunal or a regular Court has jurisdiction in a matter but the legislation, creating such Court or forum or conferring jurisdiction on the same, also ends up by providing appellate or revisional jurisdiction to the High Court itself. Obvious examples could be civil and criminal proceedings, emanating under the Code of Civil and Criminal Procedure, Income Tax References, Customs Appeals etc. In such matters, where the High Court itself is the repository of the ultimate appellate, revisional or referral powers, conferred by the relevant statute, it is in the rarest of cases that the High Court may be persuaded to entertain a Constitutional petition and to enforce the Constitutional remedy in preference to its own appellate, revisional or referral dispensation arising in course of time. Some discussion on the point is to be found, regarding Income Tax matters and the alternative remedy of a reference, which lies in a High Court under section 136 of the Income Tax Ordinance, 1979, in Yasmeen Lari v. Registrar, Income Tax Appellate Tribunal, 1990 PTD 967. There the Constitutional relief was declined for the sole reason that the alternative of a reference under the suited section of the Ordinance was an equally adequate remedy. As to a more or less similar situation of a somewhat conditioned appeal in contemplation of the Banking Tribunals Act, 1984, since supplanted by the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, the limited extent to which the Constitutional remedy would be addressed, in the face of a very restricted statutory appeal to the High Court reference may conveniently be made to Balochistan Trading Company (Pvt.) Ltd. v. National Bank of Pakistan 1998 SCMR 1989.

Relevant to Customs disputes, mention may be made to the comparatively recent development in the way of an amendment, effected through the Finance Act, 1997, introducing section 196 of the Customs Act, 1969, whereby a final appeal has how come to be postulated to lie in the High Court to be heard by a Bench of not less than two Judges. The outcome is obvious namely, that, following upon the amendment, the High Court shall be ever more circumspect in directly entertaining Constitutional Petitions touching outcome controversies and, instead, prefer its own normal appellate jurisdiction to be invoked in due course. As regards the appeals and revisions contemplated by an under the Codes of Civil and Criminal Procedure there is a plethora of precedent, contemplating that the High Court, itself being the Court of final resort under such statutes, should be extremely slow in allowing its own general jurisdiction to be sidetracked and rendered ineffective in matter over-stretched to be tackled on the Constitutional plane."

8. It is a well-settled proposition of the law that it is incumbent upon the petitioner to have availed the alternate remedy under the law before approaching the High Court for redressal of the grievance by invoking constitutional jurisdiction under this Article. Where an alternate forum is provided, provisions of Article 199 are not to he attracted. Article 199 is attracted where the order passed by an authority purportedly lacks jurisdiction. Whereas in the instant petitions the only grievance of the petitioner was with regard to the alleged misinterpretation of section 187 by the Additional Commissioner which could be agitated, if so advised, before the Commissioner of Income Tax (Appeals) and invoking of constitutional jurisdiction under Article 199 at this stage appears to be quite premature. The alternate remedy provided is a remedy in law and could in no way be considered to be less convenient, beneficial or effective. Hence in our opinion the principle of "remedium juris" is fully applicable to the present petitions. Not a single word has been uttered by the learned counsel appearing on behalf of the petitioner that no alternate remedy is available to him against the orders passed by the Additional Commissioner under the provisions of section 187 of the Ordinance. It would not be out of place to refer to a decision given by the Hon'ble Supreme Court of Pakistan in the case of Syed Match Company Ltd. v. Authority under Payment of Wages Act reported as 2003 SCMR 1493 wherein the Hon'ble apex Court observed that "party had no discretion to ignore provisions of appeal and file constitutional petition instead".

9. Learned counsel has further submitted that in previous years the issue was decided in his favour, suffice to say that in tax matters every year is a separate and distinct entity and the principles of estoppel andres udicata do not apply to tax proceedings. However, before parting' with the order we would like to observe that if petitioner moves stay application to the tax authorities the same would be considered sympathetically.

10. We in view of above findings have therefore come to the conclusion that as alternate remedy is available to the petitioner invoking of the jurisdiction under Article 199 of the Constitution in the present circumstances is not warranted and the petitions are hereby dismissed in limine.

11. Above are the reasons for our short order dated 28-12-2010 through which we have dismissed the instant petitions along with the listed applications.

M.H./B-1/KPetition dismissed.